PUMP IT

TBY talks to Rubén Darío Lizarralde, President of Campetrol, on production rates, what oil and gas contributes to the economy, and competition in the sector.

BIOGRAPHY

Ruben Dario Lizarralde is the President of Campetrol. He completed his master’s degree in management from the University of Miami and a course in senior business management at the Business School (Inalde) of the Universdad de la Sabana. In 1977, he became a manager and administrative director of the Corporación de Ahorro y Vivienda (Colmena) and, in 1981, was appointed administrative vice president of the Federación de Aseguradores Colombianos (Fasecolda). Later, he served as Deputy Minister of Economic Development and, in 1982, he was made administrative vice president of the Compañía Colombiana Automotriz. He served as the Minister of Agriculture and Rural Development from 2013-2014.

What have been your main action lines since being appointed president of Campetrol in 2014?

I have worked primarily on two fundamental aspects. The first of these is to show the country the importance of the future of oil, as it represents around 50% of the country's exports and over 25% of its tax revenues. It is a sector that positively impacts the country's economy, even with the currently low prices facing the oil sector. The oil sector is the largest exporter in the country, which is why it so directly impacts the economy. Depending on the flows of foreign currencies, the economy has the opportunity to grow through exports and the level of foreign currencies. From my point of view, the oil sector was and is a somewhat dormant sector despite its already important role in Colombia's economy.

What level of growth in production has the Colombian economy seen over the last few years?

There were some policies undertaken a few years ago that have contributed to the strengthening of investment in the oil segment in the economy and that has spurred production up to 1 million bpd. This process started in the last years of Pastrana's government to impress the intermediate companies, and the production level over the past decade has risen from nearly 600,000bpd to around 1 million bpd. That increase in production generated more income for Colombia; however, the country should have administrated this ideal condition to boost other industries, which unfortunately did not happen. Since I arrived at Campetrol, we have tried to demonstrate how the hydrocarbon and oil sectors could have contributed in different ways to the economy in order to provide a more sustainable system of growth to Colombia. We are trying to change the conception of the unique exclusivity of the oil sector.

How can the oil sector contribute to the Colombian economy with other alternatives?

Campetrol has shown to the Colombian government and ministries how the oil sector could help other sectors to create a more stable economy. We think about the future, because oil will eventually dry up and Colombia should not miss the opportunity to develop alternative sectors while we still have this natural resource. Some of these alternatives include the agroindustry and industrial sectors. We have shown to regional governments how the oil sector could directly contribute to the development of industry in Colombia; we are focused on that and if we do not strengthen the economy, we will find ourselves in a risky position. Colombia has missed several chances to start this process, but there are still opportunities to do that.

How could the peace agreement boost the oil sector?

This is a crucial issue for developing the oil sector, because many remotes areas where guerrillas are present have not been explored by the oil industry. We have to give more importance to regional authorities and public entities, and we have to strengthen them in those regions. We need to further institutionalize Colombia, and oil can play a significant role in doing that.

How competitive is the oil sector in Colombia and what steps is Campetrol taking to face this difficult scenario?

In these kinds of scenarios of such volatility in oil prices, it is difficult to boost the sector. Companies are currently experiencing difficult times, struggling to survive while trying not to diminish production. It is a complex situation for companies and the sector on its own, because investments have been cut and many people have lost their jobs in regions where the oil sector is the only economic prospect. Some measures have been taken, and Campetrol has aims to help the sector. We have convinced oil companies of the repercussions of their decisions and how the falls in oil production affect everyone. It is the main business chain of the country and connects the economy with society. It is a challenge that we face with the current production decrease.